The demand for frac sand is expected to grow at a slower rate this year as E&Ps make progress in stabilizing the amount of proppant used to complete wells in U.S. shale plays, though recipes are still being optimized.
This, according to analysts at Westwood Global Energy Group, follows a period in which frac sand supplies rose by 116% on what the firm described as overstated market demand by industry analysts between 2017 and 2018, contributing to an overbuild of mines. To balance the market, the firm believes between an estimated 30 to 50 million tons needs to be removed over the next 12 to 18 months.
“The industry must now face the consequences of ‘sunshine pumping’ and market exuberance that occurred in 2017 and 2018,” Todd Bush, head of unconventionals for Westwood Global Energy Group, said in a statement. “Balance needs to be restored to the market with frac sand supply reductions.”